NewYork, Nov 3: In a dramatic turn of events, Sam Bankman-Fried once hailed as the golden boy of the cryptocurrency world, has been found guilty on all counts by a jury in New York.
The verdict was reached after a five-week trial, and Bankman-Fried now faces the possibility of a staggering 110 years behind bars. The sentencing for the man widely known as “SBF” will be determined later.
US Attorney Damian Williams, in a strongly worded statement, declared that Bankman-Fried had masterminded “one of the biggest financial frauds in American history,” describing it as a multibillion-dollar scheme designed to make him the king of crypto.
Williams highlighted that while the cryptocurrency industry and players like SBF might be relatively new, the kind of fraud and corruption involved in this case is as old as time and will not be tolerated.
Bankman-Fried’s lawyer, Mark Cohen, expressed disappointment with the verdict and asserted that his client maintains his innocence. Cohen stated that Bankman-Fried will continue to vigorously fight the charges against him.
A graduate of the Massachusetts Institute of Technology (MIT) and a billionaire before the age of 30, Sam Bankman-Fried had swiftly risen to prominence in the crypto world.
He co-founded FTX, a small startup, in 2019, and turned it into the world’s second-largest cryptocurrency exchange platform.
However, in November 2022, the FTX empire crumbled as it struggled to manage the massive withdrawal requests from customers who had discovered that some of the funds stored at the company had been used for risky operations at Bankman-Fried’s personal hedge fund, Alameda Research.
During the trial, some of Bankman-Fried’s closest associates testified that he was the driving force behind the decisions that led to the disappearance of $8 billion from the FTX trading platform.
In their closing arguments, prosecutors portrayed Bankman-Fried as an extremely intelligent individual driven by greed who was well aware of the actions that led to FTX funds being covertly transferred to Alameda.
The defense, on the other hand, argued that their client had acted in “good faith” and had been overwhelmed by circumstances and the financial incompetence of close associates who testified against him in exchange for leniency from prosecutors.
A pivotal witness in the trial was Caroline Ellison, the former CEO of Alameda and Bankman-Fried’s on-and-off-again girlfriend.
She revealed that they had misappropriated “around $14 billion” from FTX clients and that Bankman-Fried, as the owner of Alameda, had “directed me to commit those crimes.”
The embezzled funds were used for various purposes, including venture capital deals, political contributions, luxury real estate in the Bahamas, celebrity endorsements such as Tom Brady and Gisele Bundchen, and even the naming rights for the Miami Heat’s home arena.
According to prosecutors, at the time of FTX’s collapse, just over $8 billion belonging to customers had been lost in bad investments at Alameda.
Bankman-Fried admitted during the trial that he had made mistakes but vehemently denied any intent to defraud anyone.
Prosecutor Nicholas Roos argued that the jury needed to determine whether “the defendant knew taking the money was wrong” and asserted that Bankman-Fried knew it was wrong but believed his intelligence would allow him to escape consequences.
The sudden collapse of FTX rattled the cryptocurrency world, and it is now slowly recovering from the shock.
In response to the verdict, US Attorney General Merrick Garland commended the prosecutors and the FBI for their “outstanding work in bringing Mr. Bankman-Fried to justice.”
Garland emphasized that this case should serve as a clear message to anyone attempting to conceal their crimes behind the guise of a new and complex technology: the Justice Department will hold them accountable.
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